In the two decades since billionaire mining investor Robert Friedland founded Ivanhoe Mines Ltd., his small team has made some of the biggest mineral discoveries in the world.

In the Democratic Republic of Congo, it has done so while trading and contracting with companies controlled by one of President Joseph Kabila’s brothers, searches of thousands of pages of Congolese corporate records obtained by Bloomberg show.

Ivanhoe’s unearthing of Africa’s largest copper deposit in Congo last year after more than a decade of exploration work has helped quintuple the company’s stock price, making it the best performing share on the main Canadian index over the past 12 months. The discovery adds to other successes by Friedland, which include building the Oyu Tolgoi copper-and-gold mine in Mongolia’s Gobi Desert and discovering the Voisey’s Bay nickel deposit in Canada, which he sold in 1996 for more than US$3 billion.

Over the past seven years, the Vancouver-based company has done business at least five times with two firms that are majority owned, via parent companies, by 38-year-old Zoe Kabila, a member of the National Assembly of the Democratic Republic of the Congo. The companies are two of at least 12 Congolese businesses owned in part by Zoe. They are part of a sprawling network of more than 70 enterprises controlled by the president and his relatives, first reported by Bloomberg last year.

Laurent-Desire Kabila, their father and former Congolese president, had at least 25 children, according to a biography published in 2003.

Business Empire

The transactions shed more light on the commercial interests of the Kabila family, which has ruled the central African nation for two decades. Opposition parties last year accused the president of defying the constitution and purposely delaying elections to stay in power, but accepted that he could remain in office if an election was held this year. The head of the country’s electoral body this month said elections can’t be held this year and will be delayed again, prompting criticism from the United Nations.

The Kabilas’ commercial interests, which as of last year included stakes in Congo’s biggest mobile-phone company and one of its largest banks, extend across the economy, making it difficult for corporations to operate without coming into contact with a company that has ties to a member of the ruling family. While Zoe publicizes some of his commercial holdings, like the luxury hotel owned by his Cosha Investment SARL, his commercial dealings with some of Congo’s biggest investors haven’t been reported by the media before.

Robert Friedland, the chairman and founder of Ivanhoe MinesRODGER BOSCH/AFP/Getty Images

In one deal, state documents show how one of Zoe’s companies used a mining license acquired from Ivanhoe to establish a joint venture with Australia-listed Nzuri Copper Ltd. and Belgian commodity trader Traxys SA, now owned by Carlyle Group LP.

While some information on the transactions has been disclosed in stock-market announcements or records held by Congo’s mines registry, Ivanhoe, Nzuri and Traxys have never disclosed Zoe’s controlling interest in the companies with which they’ve been trading, contracting and partnering, according to a review of publicly available corporate filings by Bloomberg.

Signed Contracts

Ivanhoe confirmed by email that it signed contracts with the two companies linked to Zoe — Tanga Logistics and Mining SA and La Generale Industrielle et Commerciale au Congo SARL, or TLM and GICC respectively — but said it’s never dealt with him personally and had no knowledge of his involvement in the businesses.

Nzuri also said it’s never dealt with Zoe and declined to comment further. Carlyle referred questions to Traxys, which declined to comment. Zoe was unavailable when Bloomberg sought comment through intermediaries over a period of more than two months.

Ivanhoe contracted Congo-registered TLM in 2015 to complete a series of civil works at its Kamoa copper project, the miner said in a stock-market filing on Aug. 12 of that year. TLM is a wholly owned subsidiary of Congo-based Katanga Premier, which is 60 per cent-owned by Zoe, corporate records show. The companies were set up in 2012 and 2014, by which time Zoe, elected in 2011, was a member of parliament.

Ivanhoe stock-market announcements and financial statements don’t disclose the value of the contract awarded to TLM, nor do they mention its ownership.

‘Supporting Companies’

“No information has come to Ivanhoe’s attention that would enable it to confirm the ownership information of these entities, either today or at the time of contracting,” Ivanhoe Chief Executive Officer Lars-Eric Johansson said by email. TLM was “invited to submit bids in multiple bidding competitions on construction and supply contracts” as part of Ivanhoe’s commitment to “using and supporting local DRC companies and service providers,” he said.

The US$900,000 deal was awarded in June 2015, one of two contracts won by TLM in the past two years, worth a total of US$1.75 million, Johansson said. Ivanhoe didn’t disclose the value of the contracts to the stock market because the sums were “immaterial,” he said.

The month before the first TLM contract was awarded in June 2015, Congo’s government opposed Ivanhoe’s US$412 million sale of 49.5 per cent of its holding in Kamoa to China’s Zijin Mining Group. Ivanhoe and TLM say there’s no connection between the award of sub-contracts and the lifting of the government’s objections in September 2015, in a deal that increased Congo’s stake in the project.

“Our intentions with these contracts and transactions was not to gain influence, but to enter into transactions that implemented our business strategy, intelligently and in full compliance with applicable laws,” Johansson said. Zoe’s company wasn’t always successful, he added. In 2015, TLM lost a separate bid for a US$37 million contract, he said.

TLM Chairman Theophas Mahuku, Zoe’s business partner and fellow shareholder, said in an interview that the contract had no link to the dispute between Ivanhoe and the government.

Share Price

Ivanhoe’s share price jumped 15 per cent on the day of the announcement that an agreement with the government had been reached. A month later, Ivanhoe sold three mining permits to another of Zoe’s companies — GICC. Records held by Congo’s mining registry show that five mining licenses have been transferred from Ivanhoe to GICC since 2015.

Ivanhoe sold the permits to GICC in two transactions in October 2015 and January 2016 for a total of US$200,000, retaining the right to a 5 per cent royalty on future production, Johansson said. The sales were part of the company’s strategy to focus on the development of Kamoa, he said.

At the time, GICC was 90 per cent owned by Cosha, which in turn was 90 per cent owned by Zoe, according to filings from 2014. Mahuku describes Zoe as a silent shareholder who wasn’t involved in the day-to-day running of the company. Cosha transferred its 90 per cent stake in GICC to Mahuku in November 2016, according to articles of association provided by Mahuku.

The year 2015 wasn’t the first time Ivanhoe transacted with Zoe’s businesses. GICC acquired another exploration area, Kalongwe, from Ivanhoe in 2010 for US$1.2 million, before signing an agreement to develop the mine in November 2013 with Nzuri Copper, then known as Regal Resources Ltd., and Traxys.

Ivanhoe reported the sale price in its September 2012 IPO prospectus, but didn’t disclose the buyer. “The actual sale was conducted through an agent under power of attorney, who identified and contracted with the buyer, which was only later revealed to Ivanhoe as GICC,” Johansson said.

Nzuri and Traxys paid GICC US$2 million to set up the joint-venture in 2013, according to Nzuri’s filings at the time. GICC has since been paid at least another US$4.26 million and US$1.26 million in shares by Nzuri for increased control of the project, while retaining a 10 per cent stake in the local operating company, Kalongwe Mining SA, according to Nzuri stock-market announcements.

Nzuri Chief Financial Officer Anthony Begovich said the company dealt with GICC management and never with Zoe.

Regulators’ Expectation

Traxys CEO Mark Kristoff declined to comment on the project, saying Traxys is “a very small shareholder” in Nzuri without board representation. Between 2013 and 2016, Traxys was a 30 per cent shareholder in the local operating company.

GICC is the third-largest stockholder in Nzuri with a 4.8 per cent stake, according to data compiled by Bloomberg.

None of the companies have been accused of wrongdoing and it’s not illegal to do business with a sitting member of parliament. Still, knowing who owns businesses that a company is contracting or trading with is essential when operating in complex markets such as Congo, according Steven Fox, the CEO of global risk-advisory firm Veracity Worldwide.

“It is a clear expectation of regulators,” he said by email from New York.